Flooded by cheap Chinese goods, Latin America is fighting back to protect its industries
Flooded by cheap Chinese goods, Latin America is fighting back to protect its industries
Flooded by cheap Chinese goods, Latin America is fighting back to protect its industries
cross-posted from: https://lemmy.sdf.org/post/50302947
China has been flooding Latin American markets with low-priced exports, especially autos and e-commerce goods, as its exporters adjust to U.S. President Donald Trump’s tariffs and geopolitical moves.
Chinese businesses face slow demand at home. They need new markets for their products as the country ramps up production in many industries. Exports to Latin America, a market of more than 600 million people, and other regions have climbed while exports to the U.S. fell by 20% last year.
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The influx of made-in-China cars, clothing, electronics and home furnishings has rankled countries trying to build their own globally competitive industries. Some, such as Mexico, Chile and Brazil, have raised tariffs or taken other measures to protect their local industries.
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Argentina is bearing much of the brunt of rising Chinese imports, as local factories shut down and lay off workers in a manufacturing sector that employs almost a fifth of its workforce.
The volume of e-commerce imports -- mostly from China -- soared 237% in October from the same month a year earlier, Argentine government statistics show.
“We’re operating at historically low capacity as imports break record highs,” said Luciano Galfione, president of the nonprofit Pro Tejer Foundation, which represents textile manufactures. “We’re under indiscriminate attack.”
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China needs Latin America’s vast natural resources for its hungry industries, from lithium in Brazil to copper in Chile and fishmeal in Peru. But trade deficits with China are growing across the region.
For some nations, “China just sells, they don’t buy,” said Guajardo.
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In most cases, China exports mostly manufactured goods and imports raw materials. But the relationship goes far beyond those basics.
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China provided loans and grants to countries in Latin America and the Caribbean in 2014-2023 worth roughly $153 billion -- the largest source of official sector financing for the region -- compared to approximately $50.7 billion that the U.S. provided, according to AidData, a research lab at William & Mary, a public university in Virginia.
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Mexico has long sought to protect local industries, imposing tariffs of up to 50% on imports from China, including automotive products, appliances and clothing.
Brazil is among the countries eliminating or phasing out “de minimis” import tax exemptions for overseas parcels costing less than $50, in part to target cheap imports from China. It’s also increasing tariffs on EV imports. Other countries may follow suit, as some analysts expect more protectionist measures including tariffs and stiffer regulations coming out of Latin America.
Chile has raised tariffs and imposed a 19% value-added tax on low-value parcels.
Given China’s growing leverage, though, countries face a “balancing act when it comes to protectionist policies,” said Leland Lazarus, founder of Lazarus Consulting, which focuses on China-Latin America relations.
“They can’t go too far, or China may retaliate in kind,” he said. “So, their leverage has a limit.”